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Purchase Consideration

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Purchase Consideration

  • This topic has 4 replies, 3 voices, and was last updated 4 years ago by Stephen Widberg.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • August 24, 2020 at 4:33 pm #581786
    ikmughal28
    Participant
    • Topics: 66
    • Replies: 63
    • ☆☆

    Hi
    Need to ask that when an entity issues Loan Notes as a purchase consideration when acquiring the subsidiary, will this Loan Notes be subsequently measured at amortised cost or just the physical interest payment in the form of cash?

    Thanks

    August 25, 2020 at 1:25 am #581823
    nhungnguyen6710
    Participant
    • Topics: 2
    • Replies: 4
    • ☆

    Hi Ikmughai
    I think loan notes are a financial liability under IFRS9, therefore, if the entity is not holding them for trading, they should be subsequently measured at amortised costs. For amortised cost model, interests are added to and payments are deducted from the carrying amount of the loan notes

    It’s my opinion

    August 25, 2020 at 3:39 pm #581941
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    Yes – measured at amortised cost

    August 25, 2020 at 4:43 pm #581970
    ikmughal28
    Participant
    • Topics: 66
    • Replies: 63
    • ☆☆

    Thanks!

    August 26, 2020 at 3:21 pm #582166
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    My pleasure.

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    Posts
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